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The emergence of BT as a football
broadcaster did eat into operating profits. The telecoms giant’s
financial heft forced up the price Sky pays for Premier League rights
from £540million per year to £760million.

But the markets had expected the
extra cost to be felt during this quarter and shrugged off the resulting
8 per cent fall in operating profit to £285million.

The figure was also affected by a
£70million outlay on converting set-top boxes to connect to the
internet.But Sky expects this investment to pay off rapidly, pointing to
record growth in the number of connected Sky+HD boxes, up 642,000
during the quarter to 3.4million, and a fourfold increase in On Demand
usage.

The broadcaster believes the
investment will encourage customers not to switch to other providers,
while offering them new ways to spend money.

All eyes will now turn to BT’s next set of results, due later this month.

If both BT and Sky have managed to
maintain steady growth in broadband, it will spell bad news for
competitors Virgin Media and TalkTalk.